'No firm decision' says Gateway

Gateway's Dublin plant may be among those affected

Computer manager Gateway played down - but did not withdraw - plans to close down its European operations in the UK and Ireland.

"Europe is a different business, and were evaluating whether we should be there," said Gateway founder and chairman Ted Waitt.

Gateway has notified its 1,000-plus European employees that it is mulling the closing of a plant in Dublin, along with other operations in Ireland and Britain.

"But we haven't made any firm decisions on closing," said Mr Waitt.

"We're analyzing and coming up with several scenarios, which could include downsizing as well as closing."

'Dramatic move'

But few observers believe that the UK and Irish operations will be saved.

Since companies are obliged by UK and Irish laws to consult for at least 30 days before making significant lay-offs, most fear that negotiations with staff are merely a formality.

The announcement "underlies how Gateway is in the worst position in the PC market right now", Eric Rothdeutsch, analyst at Robertson Stephens, said.

"This is clearly a dramatic move by Gateway and a dramatic shift of strategy."

Closure would spell redundancy for 850 workers at a Dublin plant whose opening in 1993 symbolised the transformation of Ireland into a technology-backed economy.

Three years ago the plant was the site for a much-publicised meeting between then US president Bill Clinton and Irish Prime Minister Bertie Ahern.

Gateway also operates stores in Ireland and Britain, with its UK headquarters based in Uxbridge.

Farmhouse roots

Gateway was founded in 1985 in a farmhouse in Iowa, growing within 15 years into a multinational concern worth $19.6bn and employing 20,000 people.

But the firm has been particularly badly hit by slowdown in the global economy, finding that a store expansion programme in the US last year co-incided with a shrinking in the country's overall PC market.

In Europe, Gateway's sales have slumped by 46%, the company's Ireland chief Mike Maloney said on Thursday.

Mr Waitt, who spent a year in semi-retirement, has seized executive responsibilities in an effort to steer the firm back to profitability.

Gateway, which reported profits down 22% to 242m last year, announced a $128m loss in its last quarterly results.